Mortgage Rates Jump Back Above 6% After Iran Strikes Push Oil Prices and Treasury Yields Higher

Mortgage rates in the U.S. jumped back above 6% this week as Iran's strikes in the Middle East sent oil prices and Treasury yields higher, wiping out last week's modest decline in borrowing costs for homebuyers.

The average 30-year fixed mortgage rate, which had drifted close to the 6% threshold, is now back above that level after global markets reacted to renewed conflict involving Iran.

Recent data showed the average rate on the 30‑year fixed loan rose to 6.12%, slightly higher than the prior week and reversing a downward trend that began late last year, according to CNBC.

Rates had fallen from peaks near 8% in late 2023 as inflation cooled and the Federal Reserve cut interest rates, but they remain well above the ultra‑low levels of the pandemic era.

The latest move in mortgage costs is closely tied to a sharp jump in oil prices following U.S. and Israeli strikes on Iran and Tehran's retaliation, including restrictions on shipping through the Strait of Hormuz.

Analysts say the threat to one of the world's most important oil routes has driven crude futures sharply higher, with some expecting prices to open the week near or above $90 a barrel from about $67 on Friday.

A prolonged disruption could push prices above $100 a barrel, raising fuel costs for households and businesses and feeding back into broader inflation.

Higher oil and energy costs have also pushed up U.S. Treasury yields, a key benchmark for mortgage pricing. The 10‑year Treasury yield climbed roughly 8 basis points on Monday to around 4.04%, while longer‑term yields also moved higher as investors reassessed inflation risks from the conflict, Bloomberg reported.

Normally, geopolitical shocks can push investors into safer assets and pull yields down, but concerns that expensive oil will reignite inflation have outweighed that safe‑haven demand.

For buyers, the move back above 6% means monthly payments are slightly higher than they were just a week ago, adding to affordability pressures after several years of rising home prices.

Experts still expect mortgage rates to trade in a relatively narrow band, with forecasts for the 30‑year fixed hovering roughly between the high‑5% and mid‑6% range over the coming month, but warn that further surprises in inflation or the Middle East could cause more volatility.

Housing analysts say well‑qualified borrowers may still find slightly better offers if they shop around, yet many households are delaying purchases in hopes that rates will fall more decisively later in the year, as per CBS News.